Budget hotel major Oyo Hotels & Homes has initiated talks with several investors to raise nearly $1 Bn, according to report published in economic time (ET). ET report claims that the talks are still in initial stage and may gather pace in the next quarter. Quoting an unidentified source, report added that the Gurugram headquartered company is looking to bring new lead investors but will also engage with existing investors including SoftBank.
Oyo has officially declined to comment on the news report. An email query sent by Techpluto staff did not elicit any response at the time of publishing this story.
If this rumored round does go through then it will propel Oyo’s valuation to whopping $10 bn. This will make the SoftBank backed company part of the ‘elite unicorn’ group with double digit valuation. This elite group includes celebrated startups like Paytm and Walmart owned Flipkart.
Only time will tell whether Ritesh agarwal’s company can clock double digit valuation. However, there can be little argument over the fact that his company’s unabated international expansion has managed to win investor’s confidence. Especially because company’s aggressive international expansion has not come at the cost of its balance sheet. It has managed to keep the cash burn rate under-control while trying to consolidate position in highly competitive markets like Southeast Asia, Europe and U.S.
According to Oyo’s filing with Registrar of Companies (ROC), the Gurugram Company reported revenue of $60 million against loss of $52 million for financial year ending March 2018. The company estimates revenue to reach approximately $214 million and keep losses at nearly $74 for the next financial year.
Thanks to relentless international expansion, today Oyo is the sixth largest sixth largest hotel chain company in the world. Agarwal, according to sources, is confident about taking his company further higher and will need more funding for achieving this.
Oyo’s claim to the title of being one of the largest hotel chain companies is no small achievement by any means. With the exception of ride-hailing major Ola, the Gurugram based company today is probably the only Indian startup to boost global presence.
Among all the international markets, China apparently appears as the key market for the hospitality major. Today the company claims to have become the second-largest hotel group in China with 4,50,000 rooms across 10,000 properties. It operates in China under its subsidiary brand Oyo Jiudian.